EUR: Strength coming? - Rabobank

The EUR has extended yesterday’s better tone as softer than expected US economic data yesterday and stronger German CPI inflation and labour data encouraged the pullback in EUR/USD.

Key Quotes

“That said, while the bounce in the EUR has dented the downtrend in EUR/USD that has dominated since the middle of April, we still see scope for further USD gains in the medium-term. Not only is the relatively hawkish position of the Fed supportive for the USD, but investors still have to assess the impact on the EUR of populist demands in Italy going forward.”